Insight Into Action

Driving change with sustainable transport

Working in the largest pharmaceutical distribution contract in Europe, Rodion is responsible for business development analysis and providing expertise in bespoke KPI reporting systems. As a contract lead for research and innovation, he is deeply involved in continuous improvement, sustainable development and emissions reduction initiatives within the supply chain. The ultimate aim of the project is to de-carbonise the transport part of contract logistics without compromising profitability and performance.Show Bio

Our responsibility to future generations is set as the main principle of Sustainable Development, a concept introduced by Brundtland Report in 1987. Since then, we often read about the importance of sustainability when discussing the environment, climate change and corporate social responsibility (CSR). And yet, what does sustainability really mean for logistics? And how can your 4PL provider drive sustainable development?

With millions of deliveries made every day across the world, it is not surprising that the logistics industry produces over a quarter of global C02 emissions. The Paris Memorandum 2015 set out to tackle this issue by setting obligations to reduce carbon emissions by 2050. Yet, this isn’t the only reason why logistics companies are turning to more ecological solutions.

As climate change becomes a growing concern, customers’ purchasing decisions are evolving. More customers are turning towards sustainable solutions, and moving towards green products and services that incorporate honest and meaningful environmental sustainability. Any business that is tackling environmental challenges ahead of competition will invite more investment and be more attractive to customers in the short, medium and long term.

The road to sustainable transport

Only by identifying emissions’ sources and their scope does it becomes possible to take the next step and develop a plan that will reduce pollution and ultimately result in sustainable transport – a form of transport that has zero or negative emissions. The industry is still at the first stages of this bold vision of the future, both technologically and operationally. However, when it comes to carbon footprint calculations, Yusen Logistics is well ahead of competition.

This has been achieved through ongoing research collaboration with Cardiff University that has expanded our CO2 emissions visibility from simple A to B movements to a much more complex final mile distribution. Finally, implementation of the plan is possible through effective collaboration with Yusen Logistics’ partners across the supply chain - be it service providers, regulatory bodies or customers. In fact, our Control Tower provides a unique added value service for our customers who are keen to understand the true end-to-end carbon footprint of their product.

How is Yusen Logistics' C02 calculator unique?

Typically, CO2 calculators operate under the assumption of a constant route (A to B via C), dedicated transport (road freight) and average load fill factor across transport modes (air or sea freight). These assumptions are valid for large pallet LTL/FTL movements. However, once the goods reach another carrier’s hub, they are mixed with the volumes from other customers and visibility of a network movement is restricted due to factors including dynamic route planning with multi-drops rather than dedicated vehicles, and various volume configurations of both pallets and parcels.

Instead, we have developed a unique way of collecting and analysing network profile data for each customer and market in scope. This enables Yusen Logistics to more accurately estimate the true carbon footprint across the network via child hubs right up to the final customer. Our calculations show that final mile CO2 pollution can be as high or higher than emissions from the linehaul leg.

What is the next step towards sustainable transport?

We already have C02 visibility for our customers' linehaul. Now our research continues as we strive to complete the analysis for the largest European markets to bring customers of our European Supply Chain the complete end-to-end carbon footprint for their products. Once analysis is complete,Yusen Logistics will be the first Healthcare 4PL in Europe able to achieve complete supply chain CO2 emissions visibility – an important step towards sustainable supply chain development.